School district’s workers comp cost soars

/ 18 June 2012 / jennifer

Amanda Dyslin, Mankato Free Press, June 18, 2012 –

MANKATO — The Mankato Area Public School Board approved an almost 56 percent cost increase in workers compensation insurance at Monday night’s meeting.

The board approved United Heartland’s quote of $554,440 for 2012-13, up from $355,719 this year. The district worked the extra $200,000 into the 2012-13 budget, which the board adopted Monday night.

“That is a real jump,” said Jerry Kolander, director of business affairs.

The district attempted to get quotes from other insurance companies, but Hartford, Western National, AmTrust and several others declined to provide a quote for various reasons, including the large size of the Mankato school district, Kolander said.

“Most of our insurance companies around here are happy to work with smaller employers,” Kolander said. “But we send in 2,000 W2s each year. They may be a little skeptical about insuring something that large.”

Kolander said the insurance company looks at the pasts three years of claims and expected claims and bases the premium on that formula. The district didn’t have a high number of claims, Kolander said, but Supt. Sheri Allen cited one example of someone who slipped on the ice and required knee surgery.

“All it takes is just one or two claims,” Kolander said. “It’s not always just the number of claims, but the size of those particular claims as well.”

Kolander said Joe Meixl, the health and safety director for the district, provides extensive safety training for district administrators and staff. Just two years ago the district was the first in the country to earn top ratings in a nationwide OSHA program designed to recognize work sites that have “achieved exemplary occupational safety and health.”

Kolander said part of the hike simply has to do with industry standards.

“I think part of this is the insurance industry itself. They’re all raising rates,” Kolander said.

Kolander said when looking at the district’s overall budget of $87 million, an additional $200,000 isn’t particularly significant. But he likened the amount to four teachers’ salaries and said the money could be going to programming.

“Hopefully we can get our rates under control,” he said.

The board also approved a $30,000 (15 percent) increase in property and liability insurance rates and a 2 percent cost hike in bus service costs for the 2012-13 school year.

The $30,995 increase in regular to-and-from transportation services is fairly typical from year to year, Kolander said. On average, the district sees an annual increase from about 1.5 to 3 percent in transportation costs, due to a number of variables including diesel costs and increases in drivers’ salary and benefits. The board also approved a 1.8 percent hike in costs for special education transportation, or about $11,334.

Even with the hikes, the district is still 42 percent below the state average in transportation costs because it uses a per-student funding model instead of paying by the route, which is the norm, Kolander said.

“We’re encouraging (the bus companies) to be more efficient because they’re only getting paid by the number of students they’re transporting,” Kolander told the board.

Overall, the 2012-13 budget is projected to be up 1.9 percent in expenditures and 2.7 percent in revenue, due to an increase in state funding from the district’s increasing enrollment, as well as the addition of $50 in per-pupil funding approved by the legislature.

The district is also receiving $450,000 in literacy aid, which is provided based on third-grade proficiency on the Minnesota Comprehensive Assessments.

The 2011-12 budget will close June 30.